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VAT Rate Application

Dáil Éireann Debate, Thursday - 11 October 2018

Thursday, 11 October 2018

Questions (47, 51)

Pearse Doherty

Question:

47. Deputy Pearse Doherty asked the Minister for Finance if changes will be introduced to bring clarity and consistency to the VAT rating of health food supplements; and if he will make a statement on the matter. [41553/18]

View answer

Robert Troy

Question:

51. Deputy Robert Troy asked the Minister for Finance if he will introduce a reduced VAT rate on food supplements as part of budget 2019; and if he will make a statement on the matter. [41642/18]

View answer

Written answers

I propose to take Questions Nos. 47 and 51 together.

Issues of clarity and consistency relating to the VAT rating of health food supplements arise from the fact that a small selection of food supplements have historically been applied at the zero rate of VAT by concession of the Revenue Commissioners since the introduction of VAT in 1972.  The majority of food supplements, however, are charged at the 23% standard VAT rate. 

The expansion and diversification of the food supplement market since 1972 has led to a significant growth in the number and variety of food supplement products which do not qualify for the Revenue concession.  However, there remains uncertainty as to which food supplements qualify for the zero rate or not.  Revenue has received a large volume of requests for confirmation of the VAT treatment on a broad range of food supplements in recent years, leading to compliance concerns and calls for fiscal neutrality.

Revenue have engaged with industry representatives on the matter and one solution would be to legislate to apply a reduced VAT rate to all food supplements, as it is not legally possible to extend the scope of the zero rate to all food supplements.  However, this solution would mean that some food supplements would increase from the zero to the reduced VAT rate.  Before agreeing to any legislative change in this area, all consequences must be fully considered.

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